Indigenous groups were among hundreds of campaigners who occupied the construction site of the Belo Monte dam in the Brazilian Amazon to demonstrate against the project.

They have pledged to continue indefinitely with a peaceful protest against what would be the world's third biggest hydroelectric dam.

Plans for the 11,000-megawatt dam, on the Xingu river in the state of Pará, have long been a source of legal and ethical controversy in Brazil.

The country's environmental agency approved the clearing of 600 acres of forest in January so work on the $11bn (£6.8 billion) project could begin but a series of legal challenges have followed.

Earlier this month, a federal judge ruled that the environmental licensing of the dam – which could flood an area of 200 square miles and displace 16,000 people – was illegal due to lack of consultation with indigenous communities.

Weeks earlier, a judge had banned the construction consortium Norte Energia from any actions that would affect local fish stocks including using explosives and building canals.

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But the construction of workers' accommodation blocks was allowed to continue and Brazil's government has consistently insisted that the dam will be built, raising tensions with the local populace.

Now 600 protesters have occupied the site and blocked the Trans-Amazon Highway nearby and are demanding a high-level government official is sent to negotiate.

"Our ancestors fought so we could be here now" said Juma Xipaia, a local indigenous leader. "Many documents and meetings have already transpired and nothing has changed. The machinery continues to arrive to destroy our region."

The inter-American Commission on Human Rights, part of the Organisation of American States, convened a closed hearing this week to discuss the rights of indigenous people threatened by the dam but the Brazilian government refused to attend.

Amazon Watch, a US-based non-profit organisation, said the refusal "threatens to set a chilling precedent for human rights and sustainable development throughout the Americas." Sheyla Juruna, of the Juruna indigenous group, who travelled for days to attend the hearing, added: "I am appalled by the way in which we are treated in our own land without even the right to be consulted on this horrific project."